Business owners may get a loan and then realize they’ve “student loaned” themselves — by that I mean they will have thought they were signing up for something that was going to help them push through the pandemic but ultimately prevents future growth due to debt. While forgiveness is a possibility, the rules to date are extremely murky, as stated in this New York Times article.

I do not recommend either the PPP or EIDL loan to my clients unless they were not only cashflow positive pre-pandemic, but were at minimum 2x profitable above expenses. Put another way, if you did not have the extra cashflow to pay off a loan BEFORE the pandemic, it’s unlikely you will have the funds in time as lockdowns ease and businesses begin to open again.

No one knows for sure how long this will go on. Will we be able to return to life as ‘normal’ without a vaccine? What will life look like in the meantime? I suggest conservative financial planning at this time, while supporting your employees to the best of your ability so everyone comes out of this with opportunity.